The Toronto Star
July 4, 2013
Gas pipeline struggle heats up
A $623.7 million gas pipeline proposal in the GTA by Enbridge has sparked a struggle with rival pipeline firms and conservationists.Conservationists and rival pipeline companies are challenging a $623.7 million proposal by Enbridge to build a big new natural gas pipeline in the Greater Toronto Area.
But the project’s critics have opposite objections. The conservationists say the pipeline is unnecessary, and will bring more environmentally questionable shale gas into Ontario. The rival pipelines, meanwhile, want to gain access to the Enbridge line precisely so they can bring more shale gas to customers in eastern Ontario and Quebec.
Enbridge’s plan for the new 47-kilometre pipeline through the GTA is now before the Ontario Energy Board. The company declined to talk about the proposal while it’s before the board. But in written material filed with the board, Enbridge says it needs more pipe because it has doubled the number of customers in the GTA over the past 20 years, when it last boosted its pipeline capacity in the region.
The new line will be a main artery, ranging from 36 to 42 inches in diameter. Built in two separate segments connected by existing lines, it will generally follow Highway 407 eastward from Winston Churchill Blvd. to a utility right of way east of Pharmacy Ave. in Scarborough, tand hen turn south to Sheppard Ave. E.
In its application, Enbridge says it needs the new line to be in service by 2015.
Without more supply, it warns, pressures at the pumping station serving downtown Toronto “are forecast to decline below the levels necessary to serve customers by the 2015/2016 heating season.”
The new line will also provide more security for Toronto’s gas supply, Enbridge said. Currently, the company says Toronto is overly dependent on a single distribution station near Pearson airport.
In a worst-case, though unlikely, scenario, it says, a failure there could knock out gas service to 270,000 customers. The new line would eliminate that risk.
But not everyone goes along with the application.
Enbridge says it wants to fill much of its new pipeline capacity with gas from the Marcellus shale formation extending from Virginia to New York. That gas is produced by fracking — breaking up underground rock formations to release the trapped gas.
Using Marcellus gas is ideal because of its “proximity and favourable economics” compared with gas from western Canada, Enbridge says.
The Ontario Clean Air Alliance has reservations about the environmental impact of fracking, which has been highly controversial in the U.S. It argues that Enbridge should sharply increase its current spending of $15.5 million a year on energy conservation and efficiency programs in the GTA. That includes better insulation in buildings, replacing old furnaces and boilers with high-efficiency models, and switching some big buildings to geo-thermal heating.
If Enbridge were to increase its conservation budget by $33.7 million a year, the alliance argues, it would eliminate the need for the expensive new line and actually save its customers money.
The alliance isn’t formally represented at the hearings, though several of its members are interveners.
Jack Gibbons, who chairs the alliance, says importing U.S. gas drives up energy costs and means Ontario sends money south of the border. “If we invest in conservation, not only do we reduce people’s bills, but we create a lot of jobs in Ontario,” he said in an interview.
“That’s what they should be doing first, before they even consider a new supply.”
The Council of Canadians has also weighed in at the hearings, submitting a brief arguing that shale gas poses a significant risk of water pollution, and releases polluting gases into the atmosphere.
A brief submitted on behalf of Environmental Defence argues the same point, using the industry jargon of “DSM” or “demand side management”, which essentially means conservation. “We conclude that all load growth (demand growth) in the GTA area can be completely offset through commercial and apartment DSM, and that overall demand can be significantly reduced with the addition of residential and industrial DSM,” it concludes.
Union and Quebec-based Gaz Metro have filed a motion with the energy board asking them to be given a chance to bid for the right to use excess capacity on the line so they can ship gas to their customers in eastern and Northern Ontario and Quebec.
They say Enbridge has made a deal with TransCanada to allocate excess capacity in a short but crucial segment of line to TransCanada. Union says that deprives them to the ability to deliver gas from their big terminal at Dawn, near Sarnia, to eastern and Northern Ontario.
Losing access to that low-cost gas will cost those customers more than $100 million a year, they argue. “We want to make sure our customers in the north and the east get access to Dawn,” said Union vice president Mark Isherwood in an interview.
Isherwood said that the industry is finding environmentally cleaner ways to produce shale gas, and its increasing role in the province is inevitable.
“Shale gas is coming into Ontario and from the point of view of the future it’s going to grow rapidly,” he said.
Union wants the energy board to force Enbridge to hold an “open season” on its new line — a process that allows customers to submit binding bids for the right to use it.
Hearings are due to start before the energy board next month.